As a crypto investor with a few years of experience under my belt, I’ve learned to keep a close eye on inflation data, especially when it comes from the U.S., the world’s largest economy. The latest U.S. PCE inflation data was highly anticipated, and the numbers did not disappoint, or rather, they did in a way that left me feeling deflated.
Anticipation ran high among investors as the release of the U.S. PCE inflation figures approached, following the first-quarter U.S. GDP data indicating stronger economic growth than anticipated. It’s important to note that the Personal Consumption Expenditure (PCE) and its core counterpart are crucial indicators for determining the present inflation rate. Furthermore, these metrics play a significant role in informing the Federal Reserve’s decision-making process regarding interest rates.
US PCE Inflation Soars 2.7%
The Commerce Department’s latest figures reveal that U.S. PCE inflation rose by 0.3% in April, meeting market predictions. Moreover, the PCE price index for the month of April grew at a rate of 0.3%. On an annual basis, the PCE inflation rate climbed to 2.7%, aligning with Wall Street’s forecasts.
As a crypto investor, I’ve noticed that the Core Personal Consumption Expenditures (CPI) inflation rate, which excludes food and energy prices, increased by 0.2% in the recent month following a 0.3% rise in the previous one. Year-on-year, this inflation measure has surged to 2.8%, matching the increase we saw back in March.
As a crypto investor, I’ve noticed that despite the Core PCE index showing a decrease last month, the overall inflation level has been higher than expected, leaving me and other investors feeling less optimistic. Furthermore, this persistent inflation surpassing the Federal Reserve’s 2% target range has continued to negatively impact our sentiment. We are eagerly awaiting any indications of potential interest rate cuts from the U.S. Federal Reserve to help alleviate concerns over higher policy rates that have dampened the risk appetite of market participants.
Bitcoin Price Records Slight Recovery
As an analyst, I’ve observed that despite the recent inflation data causing a minor setback, Bitcoin experienced a notable surge after the PCE inflation release. Specifically, its price jumped by 0.95% to reach $68,773.23. Notably, the trading volume during this period remained relatively stable at approximately $27 billion over the last 24 hours.
As of now, the yield on the 10-year US Treasury bond decreased by 0.73%, reaching 4.515%. Simultaneously, the price of the US Dollar Index Futures dropped by 0.27%, amounting to $104.380. It is worth mentioning that the recent release of the Personal Consumption Expenditures (PCE) data has intensified speculation regarding a more accommodative monetary policy from the Federal Reserve.
Based on the data from the CME FedWatch Tool, there is a high likelihood of 99% that the Federal Reserve will keep its current interest rates unchanged during its forthcoming June meeting.
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2024-05-31 15:59